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Interest rates for bank depositors edge down

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Advisors who bemoan continuing low crediting rates on universal life insurance policies and fixed annuities can take solace in this fact: The products remain more attractive savings vehicles than bank deposits, which continue to pay out abysmally low interest rates.

For evidence of this, consider the latest report from As of Aug. 5, the average annual percentage yield (APY) on checking accounts was a depressingly low 0.11 percent, a 0.03 percent decline from the year-ago period.

Likewise, the average APY on money market accounts was a measly 0.15 percent, a dip of 0.04 percent from the year-ago period. Savings accounts rates also fell by 0.04 percent, matching the average APY on checking accounts at 0.11 percent.

By comparison, crediting rates on fixed annuities generally vary (depending on the contract term and premium) between 1 percent and 2 percent. And guaranteed minimum interest rates paid on universal life insurance policies typically are 4 percent or higher.

“Depositors are in a tough spot; as loan rates increase, their purchasing power diminishes,” writes Casey Bond of “At the same time, deposit rates have held flat for the past year, which only contributes further to the increased demand value of their dollars when inflation is taken into account.

“Considering savers are currently earning negative returns and there’s no way to predict when deposit rates will rise to levels that outpace inflation, those who have looked to their banking accounts as a tool to grow money will need to change their perspective,” adds Bonds.

The report observes also low and declining rates for bank certificates of deposit:

Average APY

One-Year Change

6-month CD



12-month CD



24-month CD



In contrast, the report reveals higher—and rising—average rates on mortgage and auto loans:

Loan product

Average Rate

One-Year Change

15-year Fixed-rate mortgage



30-year fixed rate mortgage



60-month new auto loan



38-month new auto loan



Deposit account data used in the study is derived from the interest database, which is powered by Informa Research Services. The database tracks rates belonging to more than 4,000 local, national and online banks and credit unions.